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Thursday, March 21, 2013

by VIJAY PRASHAD
Roaming through the al-Jazeera Arabic headquarters in Doha,
Qatar, last month, I was struck by its wall of relics. Behind glass lay
the remains of their journalists who were either killed in action or
else held in Guantanamo under false pretenses. The one tableaux that
most affected me was that of Tareq Ayyoub (1968-2003), the reporter
killed when US forces fired on the al-Jazeera station in Baghdad on
April 8, 2003 – three weeks into the Iraq War. It was a day when the
blood of journalists flowed through the streets of the city: US aircraft
struck Abu Dhabi Television’s station that day, and a US Abrams Tank
struck the Palestine Hotel, killing Taras Protsyuk (Reuters) and Jose
Couso (Telecinco).
After an internal US investigation, General Colin Powell said, “Our
forces responded to hostile fire appearing to come from a location later
identified as the Palestine Hotel.” Nothing was further from the truth.
Journalist Robert Fisk was on the ground in Baghdad. He wrote at that
time, “I was between the tank and the hotel when the shell was fired.
There was no sniper fire – nor any rocket-propelled grenade fire, as the
American officer claimed – at the time. French television footage of
the tank, running for minutes before the attack, shows the same thing.
The soundtrack – until the blinding, repulsive golden flash from the
tank barrel – is silent.” Mohamed Jassem al-Ali, al-Jazeera’s then head,
had given the US the coordinates to its Baghdad station so as to
protect it from attack; it was precisely those coordinates that were
targeted. A month later, al-Ali was fired by al-Jazeera allegedly for
hiring three “Iraqi agents” to work at the station. Pressure to silence
the buzz of criticism from al-Jazeera and to remove the images of
civilian casualties and suffering from its screens was fierce.
During the war, the US government either embedded journalists or tried
to excise them. The war could have only one story-line, particularly
given the unseemly means by which the US and the UK went into the war:
with lies and evasions told to the UN to strong-arm a compliant set of
governments into allowing the Bush-Blair team its way against an already
prone Saddam Hussein and his regime. Now, with the war gone ten years,
the challenge has been to try to remind ourselves that it happened in
the first place. The US “withdrawal” of troops in 2011 is treated as an
opportunity to withdraw the world’s attention from Iraq. We are told to
forget the criminal
conspiracy that led the North Atlantic into a war of aggression. We are
told to forget the way a country has been systematically destroyed not
only since March 19, 2003, but perhaps since the West colluded with
Saddam Hussein’s regime against Iran in 1980, flattering Hussein’s
immense ego to take his people into a murderous conflict with its
neighbor (1980-88), selling Hussein’s army chemical materials to allow
him to launch them against the restive Kurds (1983-88), and then trying
to contain his ambitions when he came asking for payment for Iraq’s
services to the West against Iran (1989-91). There is an imposed amnesia
about imperial motives and war aims, about the fact that many opposed
the war on grounds that came to pass, and about the sheer suffering
about the war.
What have we forgotten?
* The total number of dead – a figure impossible to fathom, somewhere
near a million or maybe higher (the Lancet’s figure from 2006 if updated
would lead us higher yet).
* The total number of refugees – around seven million according to the
UN High Commissioner for Refugees. Many fled to Syria, where the
two-year bloody war has now left these Iraqis in a position of great
peril.
* The destruction of infrastructure – now reconstructed on lines that favor the sectarian impulses of the new political class.
* The war crimes – Abu Ghraib, Falluja, the very rush to war itself.
Obama, who had staked out his own position on the impending Iraq War
clear in 2002 (“a dumb war, a rash war”), could not revisit them in
2011: he was now the Commander in Chief and would find it awkward to
belittle the sacrifices of troops who were sent to fight a false war. At
most Obama could acknowledge the debate before the war, with the
lead-up “a source of great controversy here at home, with patriots on
both sides of the debate.” The Iraq war was not perfect, he accepted,
but its outcome was good, with the troops leaving behind “a sovereign,
stable and self-reliant Iraq, with a representative government that was
elected by its people.” American liberalism is not capable of any more
than that. It is why American liberalism will not be willing to register
its complicity in such a grotesque imperialist project, nor be willing
to break with that project in the first place. Too much is to be gained
through its silence.
To go beyond Obama’s anodyne comments from last year is to accept that
Iraq was not a “dumb war” but the outcome of a system premised on
militarism and one that is capable of the harshest violence against its
enemies. During the week of the US withdrawal from Iraq, a reporter for
The New York Times found 400 pages of US military investigations on the
2005 massacres at Haditha, where US marines killed 24 Iraqis (including a
76-year-old man in a wheelchair, children and toddlers). Most of the US
troops had been acquitted by their justice system, leaving a bad taste
in the Iraqi body politic. As Michael Schmidt put it in The Times, “That
sense of American impunity ultimately poisoned any chance for American
forces to remain in Iraq, because the Iraqis would not let them stay
without being subject to Iraqi laws and courts, a condition the White
House could not accept.”
It was the aftermath of Haditha that forced the Iraqi government to no
longer give a carte blanche to US troops. The Iraqi Parliament, in a
sense, ejected the US because Washington would not allow its troops to
come under Iraqi jurisdiction. That is how the Iraq War finally ended –
not with a withdrawal but with an ejection.
I write this essay in New Delhi, remembering the day ten years ago when
Shock and Awe began and remembering the months that led to the war. I
remember two friends and teachers who departed over this decade, and
write these words with their memory in mind – Edward Said (1935-2003)
and Alexander Cockburn (1941-2012). Till the very end, Said, who died
ten years ago, held fast against the imperialist project. Not long
before he died, Said told al-Ahram that he felt that the imperialist
states wanted to “terminate some countries” and “install regimes
friendly to the United States,” a “dream that has very little basis in
reality. The knowledge they have of the Middle East, to judge from the
people who advise them, is to say the least out of date and widely
speculative.” There were no flowers and sweets thrown to US troops as
Fouad Ajami and Kanan Makiya assumed; more likely the troops were fired
upon or found themselves victims to roadside bombs. I saw Edward speak
bravely in late 1990 against Gulf War 1 in Chicago, when the tide was
decidedly in favor of that bombardment and only a handful of people saw
the ruse for what it was.
One of those other people was Alexander Cockburn. During 2002-03, I had
several wonderful interactions with Alexander as he edited the essays I
wrote for CounterPunch on the lead-up to the war. There was no fine line
to be walked – the war was being based on false pretenses. We already
knew that, and Alexander encouraged as much honest writing as possible
against imperial mendacity on Iraq. I remember once asking him how he
kept his nerve. His ancestor had burned down the White House, he told
me. Nothing his pen can do matches that. High standards set by his past,
not only for him but also for journalists with the memory of Tareq,
Taras and Jose in mind.
Vijay Prashad’s new book, The Poorer Nations: A Possible History of the Global South, is out this month from Verso Books.
Ganashakti

Dangerous for democracy

The ‘counter-affidavit’ submitted by the Union government to the Supreme
Court in the Ashok Chavan case is a scandal. Simply put, it argues that
the Election Commission of India has no power to disqualify a candidate
on the basis of his or her poll expenditure accounts, even if those
have been falsified. It holds that the ECI’s power to disqualify a
candidate “arises only in the event of failure to lodge an account of
expenses and not for any other reason…” The government is, in the
process, calling for a radical and dangerous change in the way polls are
conducted in India. If there is one issue on which there is a consensus
in the country, it is on the damage inflicted on free and fair
elections by the unbridled rise of money power. Now the government
argues that the “correctness or otherwise” of the accounts is no concern
of the body that conducts and regulates elections. The United
Progressive Alliance government is behaving with the ECI the way it has
with the Comptroller & Auditor General. It is trying to bat its way
out of ugly scams and scandals by seeking to curb the independence of
these constitutional bodies. This is dangerous for accountability and
for democracy, given the signal role assigned to the Election Commission
in our political system.

The fact that this affidavit has been filed in the Ashok Chavan case —
notoriously known as the ‘paid news’ case — makes things worse. Mr.
Chavan was facing a rough time in the Election Commission’s inquiry into
his poll expenses in the 2009 election campaign — especially the money
he allegedly spent for ‘paid news’ in his favour in several newspapers.
He has challenged the jurisdiction of the ECI on this matter in the
Supreme Court. Though the Supreme Court is still seized of the matter
and has made no ruling in the matter yet, the Centre’s affidavit raises
troubling questions about the government’s motives. Why is it
challenging the jurisdiction of the Election Commission over elections?
Why is it taking such a blatantly unscrupulous stand, and to help whom?
Yet, the damage this would do goes far beyond even the pernicious realm
of paid news. If the government has its way, it would mean there is no
institution or body that is empowered to regulate poll expenditures in
the country. It would also mean the serious erosion of the powers of
constitutional bodies like the ECI and the CAG that have performed their
duties with diligence and integrity. Over a decade ago, a full bench of
the Supreme Court held that the Election Commission had the power to
disqualify a candidate whose accounts were not filed in a true and
correct manner. That is the way to go. The government should withdraw
its ill-advised affidavit at once and not stand in the way of the ECI
doing what it is constitutionally mandated to do.

Monday, March 18, 2013

In his new book, Power Systems, Noam Chomsky raises the question: why
has the present economic crisis not evoked the sort of massive protest
from the working class in the United States of America that the Great
Depression of the 1930s did?
True, the scale of unemployment today is not as large as it had been
during the 1930s. Nonetheless it is substantial; and the crisis has
already lasted five years with no end in sight. And yet, America remains
a ‘desert’ in terms of any militant working-class mobilization against
it.
The proximate answer he provides for this difference is the collapse of
militant trade unionism in today’s US; but underlying this, according to
him, is the collapse of the US Communist Party, which had played a
major role in mobilizing the workers during the Depression. Since
Chomsky, as an anarchist, is not known to be particularly well-disposed
towards communist parties, his lauding the role of the US Communist
Party during the 1930s, cannot be dismissed as a paean from the
faithful.
Elsewhere too the communists had played a crucial role in mobilizing the
workers during the Great Depression. In Germany, for instance, the
party’s support among the young and unemployed workers had soared before
Hitler’s coming to power. Large-scale unemployment provides the soil
not only for the growth of fascist tendencies that pit one segment of
the people against another (“outsiders are stealing your jobs”), or that
invoke a mythical conspiracy by an almost non- existent minority as the
cause of the people’s woes (half a million Jews in the 1930s are
responsible for the woes of 70 million Germans), it also nourishes the
growth of a militant Left that mobilizes workers’ resistance.
The question then arises: why has the Left not emerged as a powerful
force mobilizing the people in the current crisis? Of course, the growth
of Syriza in Greece, of Beppe Grillo’s “Five Star” movement in Italy
(and possibly of Yair Lapid’s movement in Israel), can be seen as part
of people’s resistance in the context of the crisis. But these movements
are not just amorphous (which is not surprising); they lack, as yet,
any clear-cut socio-economic programme.
Their being ‘reformist’ is immaterial, for any significant mobilization
of the people must necessarily begin with a ‘reform’ agenda; what they
lack, however, is a clear programme of ‘reform’ with a thought-out
strategy of coping with the implications of putting such ‘reform’ into
practice. Their rise is more an expression of anger among the people
than a reposing of people’s trust in an alternative economic trajectory.
And the traditional communist Left continues to languish even in the
midst of the crisis, which needs an explanation.
To say that the quietude of communist formations is because of the
collapse of the Soviet Union is not enough: many communist formations in
the advanced capitalist world had broken with the Soviet Union long
before its collapse; they surely should not have been shell-shocked by
it. Likewise, to say that such formations are too small to matter at
present unlike in the 1930s when communism represented a nascent,
vigorous tendency, is not enough. The US Communist Party, like its
German counterpart, grew because of leading people’s resistance; why is
today different?
There is, in my view, a deeper reason behind it. Communism developed as
an internationalist movement at a time when capitalist countries were
engaged in a world war that apotheosized national chauvinism. Lenin’s
slogan of converting the imperialist war into a civil war, so that
workers of the belligerent countries did not have to kill each other
across trenches in the interests of finance capital, or Rosa Luxemburg’s
slogan of a European workers’ movement for peace, raised the banner of
internationalism against the national chauvinism promoted by capitalism.
The finance capital against which they sought to mobilize workers was
national finance capital, British, German, or French. The ideology of
this finance capital, as analysed by Rudolf Hilferding in his opus, Das
Finanzkapital, or as expressed in Erich Maria Remarque’s classic work,
All Quiet on the Western Front, was the glorification of the ‘National
Idea’. Socialist internationalism stood against capitalist
national-chauvinism, and mobilizing the people in each country against
the hegemony of such national capital created no theoretical problems
for the communists.
What contemporary globalization has entailed, however, is globalization
of finance, and hence the formation of an international finance capital,
which champions, not national-chauvinism, but its own brand of
internationalism. And mobilizing the people of any particular country
for an alternative agenda in the context of the crisis, which means a
struggle against the hegemony of such international finance capital,
necessarily means a retreat into nationalism, a de-linking of the
nation, presided over by a particular nation-State which the Left hopes
to capture, from the internationalism essayed by contemporary finance
capital. This puts the Left in a dilemma.
Matters would be different if international mobilizations of workers
could be carried out against the impact of the crisis; but this remains a
far cry, even in the European Union, which, in spite of being a
supra-national entity, has witnessed no significant supra-national
workers’ organizations or even movements. Communists of all kinds, and
the Left in general, have thus appeared curiously devoid of any serious
alternative agenda, since any such agenda, if voted to power, would
necessarily risk a retreat from the internationalism promoted by
finance, howsoever inadequate, into a nationalism that the Left in
advanced countries has traditionally found distasteful.
For many in the European Left for instance, the EU with all its flaws
represents an advance in a continent that had been torn apart by two
world wars. The fact that the EU is dominated by finance capital whose
cause is championed by Germany and which has brought crisis and
unemployment to the workers, is not sufficient reason for them to
abandon the European project. Unwilling to retreat, in spite of the
crisis, from even the inadequate internationalism brought about by
finance capital, and unable to put into practice any alternative
internationalist project, the Left appears paralysed for the moment. It
is the fascists, who have always revelled in national-chauvinism, with
no such inhibitions about de-linking from a supra-national project, who
appear better-placed to profit from the people’s anger at the
predicament to which they have been reduced by the crisis.
In the third world, where nationalism has been associated with
anti-imperialist struggles and hence has had an inclusive character
(against which the effort has been to pit other narrow, sectional
“nationalisms” like “Hindu nationalism”), the Left has had no such
dilemma in opposing the ‘globalization’ brought about under the aegis of
finance capital. But in many third-world countries the crisis has had
only a muted impact till now. The fact that globalization of capital has
led to some diffusion of activities from high-wage advanced countries
to low-wage third-world countries, and in the process caused high growth
rates of gross domestic product in some of the latter, has created the
illusion, even within Left circles, that these countries will be able to
avoid the crisis.
Of course, even their high GDP growth has been accompanied by rampant
dispossession of peasants and petty producers, without any corresponding
increase in organized sector employment; and, hence, by a swelling of
the relative size of the labour reserves, and of the magnitude of
absolute poverty. But this is something which many, including within the
Left, are either oblivious of, or do not take seriously enough on the
grounds that a development of the ‘productive forces’ is always to be
welcomed. Additionally, they also believe that this phenomenon of high
growth will continue in spite of the crisis, that any interruption in it
is only temporary.
We are thus in a peculiar situation where both in the first and in the
third world, the Left is paralysed in spite of the persistence of the
crisis, unlike in the 1930s when the crisis had provided the setting for
a massive worldwide growth of the Left.
This stasis, however, is likely to break soon, at least in the third
world which is now being hit by the crisis to an extent far greater than
before. Indeed China, the biggest gainer from the diffusion of
activities from the advanced capitalist world, has experienced such
social unrest that it has already started moving towards an alternative
growth trajectory with far greater emphasis on the home market. This
would require substantial measures of income redistribution towards the
working people, especially in rural areas. Similar measures will become
necessary in other third-world countries too, as they begin to
experience the crisis in all its severity. And it is the Left alone that
can lead the struggle for such a change of course.
Ganashakti

The suspended proposal to give the language a decisive place in the
civil services examination will exclude large numbers of aspiring
candidates

After a nationwide outcry, the Union Public Service Commission (UPSC)
has suspended its proposal to make English a predominant component of
the Civil Services Mains examination from this year. The UPSC must scrap
the proposals altogether. This is why:

Page 11 of the notification says: “Candidates will have the option to
answer all the question papers, except Section 2 of the Paper-I (English
comprehension and English precis) in English or Hindi. If the candidate
has had his/her graduation in any of the following language mediums
using the particular language medium for qualifying the graduate level
examination, then he/she may opt for that particular language medium to
answer all the question papers, except Section 2 of the Paper-I (English
comprehension and English precis). [Assamese, Bengali, Bodo, Dogri,
Gujarati, Kannada, Kashmiri, Konkani, Maithili, Malayalam, Manipuri,
Marathi, Nepali, Oriya, Punjabi, Sanskrit, Santhali, Sindhi, Tamil,
Telugu, and Urdu.]”

Retrograde

This indicates that if an aspirant’s mother tongue is, say, Gujarati,
but his language medium while studying for the first degree and writing
his graduate examinations, was not Gujarati, he will not be allowed to
write the exam in Gujarati. Many students study in regional languages
till Class 12. Though they shift to English medium for their college
education, their level of proficiency in English cannot be compared with
those studying in “convents” and cities. When Hindi is allowed as a
language medium for the UPSC mains examination unconditionally, why not
other languages like Tamil, Telugu, Gujarati? This step is a negation to
the “idea of India” that the founding fathers of the Constitution
envisaged.

To elaborate further, in Gujarat, my cadre, 90 per cent of the
candidates clearing the exam qualify with a language as an optional
subject, and write the exam in Gujarati.

This is true for many other States of India. Any move to change this
will be a retrograde step that will disrupt, destroy and dismantle the
dreams of many of my fellow Indians.

My brother officer, Mohammed Ali Shihab of the Nagaland cadre, an orphan
who worked as peon, pump operator and later as a teacher, made it into
the civil services examination with Malayalam as an optional subject and
with Malayalam as the language medium. Under the new rules, this man of
humble origins from Kerala would never have become a civil servant
unless he knew English (in which he was not proficient), because his
college education was not in Malayalam.

Page 13 of the notification mentions that in Paper 1 of the mains
examination: “Essay: Candidates will be required to write an essay on a
specific topic. The choice of subjects will be given. They will be
expected to keep closely to the subject of the essay to arrange their
ideas in orderly fashion, and to write concisely. Credit will be given
for effective and exact expression (200 marks). English Comprehension
& English Precis will be to test the English language Comprehension
and English precis writing skills (at 10th standard level) (100 marks).”

Paper 1 consists of 300 marks, and the marks obtained in this paper will
be taken into consideration while deciding the overall ranking in the
examination. This provision is anti-rural and anti-poor. As 100 marks of
English comprehension and English precis can create many a disparity in
the merit ranking, this is another retrograde step. In the preliminary
examination, the screening process for the Mains, the aspirant is tested
for English language skills. So, it is understood that a candidate
appearing for the Mains has already proved his English language
abilities in the preliminary examination. While the marks in preliminary
examination do not affect the overall ranking of the candidate, the
mains marks will. This will place many a rural and vernacular language
aspirant at a disadvantage.

During the training of IAS officers at the Lal Bahadur Shastri National
Academy of Administration, Mussoorie, 40 per cent of the time spent in
Phase-I of the programme is for the language of the State where the
officer will serve. The excessive focus on English will only hamper the
aspirations of rural India, and is a step that will widen the divide
between India and Bharat.

Page 11 of the notification says that: “However, in the interest of
maintaining the quality and standards of examination, a minimum number
of 25 (twenty-five) candidates should opt for a specific language medium
for answering the question papers in that language medium. In case
there are less than 25 (twenty-five) candidates opting for any approved
language medium (other than English or Hindi), then those candidates
will be required to write their examination either in Hindi or in
English only.”

This provision will seriously limit the aspirations of many in the
country. If there is only one aspirant who wants to write, say in
Santhali, why is his freedom of expression guaranteed by the
Constitution being curtailed?

Optional subject

Page 16 of notification says: “Optional Subject Papers I & II:
Candidates may choose any optional subject from amongst the list of
subjects given in para 2 (Group 1). However, if a candidate has
graduated in any of the literatures of languages indicated in Group-2 ,
with the literature as the main subject, then the candidate can also opt
for that particular literature subject as an optional subject.”

This provision implies that literature cannot be chosen as an optional
if the candidate hasn’t graduated in it. This means a medical science
graduate cannot opt for Telugu or political science graduate cannot opt
for Gujarati. This restrictive provision on the rights of the candidates
to choose his optional paper serves no purpose and suggests a lack of
application of mind and logic.

Page 10 of the notification says: “NOTE: (i) Marks obtained by the
candidates for all papers (Paper I-VII) will be counted for merit
ranking. However, the Commission will have the discretion to fix
qualifying marks in any or all papers of the examination.”

This provision is again ambiguous. In the CAT examination, each section
has a cut-off. This is already notified by the examination conducting
agency. But the UPSC only says it has the discretion to fix qualifying
marks in any or all papers of the examination.

Aside from all this, I may point out that the examination cycle is a one
year process. There are candidates who prepare over years for this
examination. Introduction of a new pattern without giving them
reasonable time to adjust to the changes is in violation of the
principles of natural justice. The proposed changes will only increase
the role of coaching centres. Candidates who have been already coached
will now be further coached to face the new subjects, shelling out vast
amounts for this.

The proposed changes are in violation of the Right to Equality (Article 14) and Right to Expression (Article 19).

Sunday, March 17, 2013

Even as the Reserve Bank of India (RBI) frets over the
high rate of inflation and wards off pressures to cut interest rates, it
is faced with another challenge. Balance of payments data for the
second quarter of 2012-13 show that the current account deficit
continues to rise, and has touched a record 5.4 per cent of GDP. Both of
these developments that would be considered signs of “overheating”
occur at a time when growth is slowing.

However, the
high current account deficit to GDP ratio is not merely because the
denominator – GDP -- is lower than expected because of slower growth. It
also reflects certain structural problems characterising the
numerator-the current account deficit-which prevent its contraction when
the economy grows more slowly.

Consider figures for
the first half of this financial year relative to the corresponding
period of the previous year. As Chart 1 shows, the current account
deficit is higher this year when compared to the previous one partly
because the trade deficit has risen from $59.1 billion to $61.1 billion
despite slowing growth. This has meant that despite absolutely large net
capital inflows into the country, of as much as $40 billion over the
first six months of this fiscal, India is just able to finance its
current account deficit. The period when a large share of capital
inflows went to buttress India’s foreign exchange reserves seems to be
over. In fact, if inflows shrink or the deficit widens, the rupee would
be under much pressure.

This raises the question as
to why the trade deficit remains high. One reason, emphasised by the
government, is that exports, especially to Europe, have been adversely
affected by the global recession. As Chart 2 indicates, goods exports
over the first six months of this fiscal year have fallen with respect
to the last and the increase in services exports has been inadequate to
neutralise that fall. But this is not the only problem. While India’s
exports are sensitive to global income declines, India’s imports have
been less responsive to the slow down in income growth. It is well known
that two items of imports have played an important role in keeping
India’s import bill high-oil and gold. In the case of both these
commodities, prices have declined in international markets during the
period in question. However, in the case of oil the quantum of imports
has increased to push up the import bill. And in the case of gold,
though the decrease in the import bill is a noticeable 13.7 per cent,
high growth rates and levels in the past have ensured that the outgo on
this account has remained high.

In sum, the import
bills on account of both oil and gold do not seem to fall much despite
rising prices and slowing GDP growth. A feature of both these
commodities, especially gold, is that it is the rich that largely
account for the growth in their demand. Over the year ended September
2011, demand for gold in India was 1059 tonnes, as compared with 214
tonnes in the US and 770 tonnes in China, whereas per capita income in
the three countries stood at $1,410, $48,620, and $4,940 respectively.
The “average” Indian could not be responsible for such “excess demand”
for gold. It is the rich who are clearly responsible. The incomes of the
rich are not affected as much by the slow down. And, the demands of the
rich are relatively inelastic or non-responsive with respect to price
changes. This structural feature influencing India’s import bill is what
accounts for the asymmetry in the response of exports and imports to
world and domestic incomes respectively. What is needed is an effort at
curbing such elite consumption. While this may be difficult to implement
through physical controls in the case of oil, it can easily be done in
the case of gold.

With the government failing to do
so, the balance in the trade in goods and services has turned
increasingly negative. But that is not all. Corporate India, which has
been borrowing heavily from international markets to exploit the lower
interest rates prevailing there, has also begun tapping the nation’s
foreign exchange earnings to meet its foreign debt service commitments.
As the RBI’s Bulletin for March 2013 notes: “Net outﬂow on account of
primary income not only continued in Q2 of 2012-13 but also showed an
uptrend mainly on account of higher interest payments under external
commercial borrowings (ECBs) and FII investments in debt securities.” In
the event, despite increase remittance receipts from Indian workers
abroad (Chart 3), there has been a decline in net receipts from income
payments.

The consequence of all of this is a
worsening of the current account deficit, which the RBI sees as having
entered the danger zone. Addressing this requires reining in the import
bill, which in turn requires curbing elite consumption. India’s rich are
the real problem.